Thursday, 30 March 2017

Even if at some late
hour Brexit does not happen for some reason,
we will still have seen the country vote for and parliament approve a
measure which inflicts substantial harm on its citizens. Anyone who
still thinks otherwise should go through this Demos report
on the opportunities and risks that Brexit creates, and ask whether
the ‘opportunities’ are in fact things that we could have done
anyway. Yes Brexit may force us to train more doctors etc etc. The
disadvantages of doing it after Brexit is that the government will be
more strapped for cash. [1]

In truth there are
precious few opportunities that Brexit will bring, and an awful lot
of costs. Those of us of a certain age have got used to losing votes
of one kind or another, but in the past you could generally point to
some group or class that gained from our loss. What has happened over
the last few years has been something quite different: a democracy
voting for things that will make almost all of the people worse off,
to satisfy the interests or ideology of a minuscule minority. [2] The
lessons we should draw from Brexit involve understanding clearly how
this could have happened so to ensure it never happens again.

The referendum
result went the way it did because
of a perfect storm of two groups who had become disenchanted with the
way society was going, or the way it had treated them. The first
group, often forgotten by the left, were social conservatives who
could be quite well off but who had probably not been to university.
The kind of people who would react to claims that the Conservatives
under Cameron were moving to the right by shouting ‘Nonsense. What
about gay marriage’. The second group, the ‘left behind’, were
the working class in once proud industrial areas that had declined
steadily for decades. They were people who said before the referendum: 'well it cannot get any worse, can it'.

The first group,
because they were social conservatives, were naturally fearful of
social change like immigration, although they were likely to live in
areas that had seen little of it. The second group were more
dependent on the state, and saw in the last few years their access to
social provision steadily decline. Yet until recently neither group would have cared much
about the EU either way, and certainly would not have been prepared
to pay good money to leave it.

In John Major’s
day the Brexiteers were a very small group who could best be
described as an irritant. (John Major had
a less kind word for them.) How did this group get to win a
referendum? Crucially, they had allies in the owners of two key
tabloid newspapers, the Mail and the Sun. Over a prolonged period
these papers pushed two key ideas: that we were in some important
sense ‘ruled by Brussels bureaucrats’, and that immigration was a
threat to public services and wages. The first claim resonated with
social conservatives, and the second with the left behind.

After John Major’s
time in office, this alliance encouraged the opposition to use
immigration as a stick with which to beat the Labour government. The
Conservatives talked
about the UK becoming a ‘foreign land’. Concern about immigration
started rising well before the arrival of Polish immigrants. This in
turn led to growing UKIP support. With the election of Cameron the pressure continued, and
being the chancer he was he gave into the demand for a referendum,
thinking both that it wouldn't happen (because he wouldn’t win an outright majority in 2015) and that he could win it.

The final part of
the strategy was to associate immigration with the EU. The EU was not
a major popular concern until 2016. But the tabloids were relentless
in their anti-EU, anti-EU-immigrant propaganda
before the referendum. The Leave campaign emphasised immigration (Turkey) and the public services
(£350 million), and with ‘Project Fear’
neutralised Remain’s strong card. The bias obsessed broadcast media
did nothing to expose these lies, treated academic knowledge on trade as just one opinion, and the polls showed the lies were
believed.

Some have subsequently chosen to
focus on the left behind group, and to suggest that they were both
hard done by and their concerns about immigration deserve respect. Authors
like Goodhart have suggested
that the middle class social liberals that came to dominate the
Labour party had little regard for this constituency. We can of
course debate the successes
and failures
of the Labour party, but it seems this analysis misses the important
point.

Those who voted
Leave didn’t win. If they wanted immigration to quickly fall, it
won’t. If they ‘want their country back’, they will find that
all the EU interference Brexiteers go on about amounts
to little more than a load of bananas. If they think their wages will
rise because of Brexit they will see - are seeing - the opposite.
£350 million to the NHS will become £50 odd billion to the EU.
Those that will be hurt most by loss of trade to the EU will not be in London, but the very areas
that voted most strongly to leave.

In other words the
big news is that Leave voters were conned. The only people who
will gain from Brexit will be the tabloid owners whose power will be
enhanced and the ideologues who for some reason
think the EU was stopping them reaching their promised land. That, as
I suggested at the beginning, is not something I have seen in UK
politics in my lifetime. The parallels with Trump’s election are in
this respect apt. We can no more 'reconcile' ourselves to Brexit as we can think that Trump is in any way presidential. If your takeaway from both events is that Labour
should better represent the working class and Clinton was a poor
candidate I would politely suggest you are missing something rather
important.

If there is a lesson
for the left in all this, it is to be smarter about what the hard
right is doing, and not to play along by talking about British jobs
for British workers. The main lessons are really
for those in the centre and the soft right. Don’t appease those on
the hard right by using migrants as a political weapon (a lesson that was once understood). Don’t
appease them by offering them referendums. Don’t appease the right
wing tabloids by trying to befriend their owners and protecting their backs. Don’t appease
them by being unbiased between truth and lies. If you continue to do
these things, have a look at the Republican party in the US to see
what you and your country will become.

When Donald Tusk
received the letter from Theresa May yesterday, he expressed regret
that the UK was leaving and said ‘we already miss you’. The
letter he received made clear threats to end cooperation over
security if the UK did not get the deal it wants. This made me rather
proud to be European, and rather ashamed at the actions of my
country’s Prime Minister and her government.

[1] There are only
two examples I can see where Brexit might be necessary before we can
exploit the 'opportunity of Brexit'. The first is to enable us to reform a farming
system large parts of which are heavily dependent
on subsidies. People draw analogies with New Zealand decades ago. But
any transformation will be both painful and may threaten things we
take for granted in the UK, like sheep grazing grass hills in areas
of outstanding natural beauty. (George Monbiot likes forests more
than I do.) The second is to offer
development enhancing trade deals, where of course I fully agree with
my economics colleagues.

[2] I say the last
few years because I believe it also applied to austerity, which
people voted for in 2015 despite having endured its consequences
during the previous 5 years.

Tuesday, 28 March 2017

As Justin Lewis
recalls,
an Ipsos Mori poll just before the EU referendum “found that while
most people (70% to 17%) did not believe a claim that British people
would be significantly poorer outside the EU, they were more likely
to accept (by 47% to 39%) the £350m a week figure.” Such beliefs
indicate both that Leave ran a much better campaign, and also that
the broadcast media totally failed to inform its viewers.

Those beliefs about
the economic impact of Brexit are now beginning to change, as this
series of results from a different poll
show:

One obvious reason
for this shift is the increase in inflation that the Brexit vote has
generated. This shift is important, because polls before and after
the vote also suggested that a large proportion of voters only wanted
to reduce immigration (as a motive for voting Leave) as long as it
did not cost them any money.

But put these things
together and we get something of a paradox. If being worse off was
more important than reducing immigration, and more people are now
convinced they will be worse off, why has popular opinion about the
vote itself hardly changed. The YouGov tracker poll,
which asks “In hindsight, do you think Britain was right or wrong
to vote to leave the European Union?”, has hardly moved since the
vote, with currently as many people saying Yes as No.

It is not just the
economic data that is going the wrong way. Matthew d’Ancona quotes
a senior government source as saying “the three main Brexiteers are
suddenly becoming more and more vocal about the need to keep the
[immigration] numbers sufficiently high for the needs of the
economy.” They are right of course, but it suggests another key
area in which the expectations of Leave voters will be disappointed.
Not to mention the £350 million a week coming to us turning into a
£50 billion bill going to the EU.

Here is a possible
reason for this paradox. (I admit I have little evidence for it, and
it is not the only possible explanation.) Voters feel that once a
democratic decision has been made, it should be respected, even if
they personally now feel less comfortable with the reasons behind the
decision. It is important to respect the ‘will of the people’ for
its own sake, just as it is important to keep to a contract even
though you may now regret signing it. I do not think this view is
sensible in this context, but that is a different issue.

You could use a
similar rationalisation for Labour’s evolving attitudes to Brexit.
Their latest position
is that Labour will hold May to 6 tests, one of which is to “deliver
the "exact same benefits" as we currently have as members
of the single market and customs union”. It is of course an
impossible test for May, despite what David Davis may have said. It
makes no sense coming from a party that voted for triggering Article
50, unless there was some compelling reason for supporting the will
of the people for its own sake.

The big question,
for those like me who would much rather we stayed in the EU, is
whether the same logic applies to Conservative MPs who personally
favour remaining in the EU. Is there some point at which their duty
to respect the vote is fulfilled, and does that point come before or
after they have to ratify whatever deal May delivers? I suspect
(again with not much evidence) that this depends on whether there
will be a deal or not.

The logic of this
suggests there will be a deal. (I wrote this before reading
today’s Guardian.) Any poor poll performances from the May council
elections onwards will be described as the public sending a message
that there should be a deal, rather than as the public changing their
mind about leaving. The tabloids will huff and puff, but May will
just for once
ignore them. Conservative MPs who are also Remainers will console
themselves that at least disaster has been avoided. In the end, that
one vote will bind us all.

Sunday, 26 March 2017

I’m very grateful
to Unlearning Economics (UE) for writing
in a clear and forceful way a defence of the idea that attacking
mainstream economics is a progressive endeavor. Not criticising
mainstream economics - I’ve done plenty of that - but attacking its
existence. The post gets to the heart of why I think such attacks are
far from progressive.

It is very similar
to debates over whether economics teaching should devote considerable
time to the history of economic thought and non-mainstream ideas, and
whether economists have much too much power and influence. More critical thinking, real world context and history - yes. This is what
the CORE project
is all about. But devoting a lot of time to exposing students to
contrasting economic frameworks (feminist, Austrian, post-Keynesian)
to give them a range of ways to think about the economy, as suggested
here,
means cutting time spent on learning the essential tools that any
economist needs. As Diane Coyle and I argue,
economics is a vocational subject, not a liberal arts subject.

Let me start at the
end of the UE piece.

“The case against austerity does not depend on whether it is ‘good
economics’, but on its human impact. Nor does the case for
combating climate change depend on the present discounted value of
future costs to GDP. Reclaiming political debate from the grip of
economics will make the human side of politics more central, and so
can only serve a progressive purpose.”

Austerity did not arise because people forgot about its human impact.
It arose because politicians, with help from City economists, started
scare mongering about the deficit. We had ‘maxed out the nation’s
credit card’ and all that. That line won not one but two UK
elections. Opponents of austerity talked endlessly about its human
impact, and got nowhere. Every UK household knew that your income
largely dictates what you can spend, and as long as the analogy
between that and austerity remained unchallenged talk about human
impact would have little effect.

The only way to beat austerity is to question the economics on which
it is based. You can start by noting that none of the textbooks used
to teach economics all over the world advocate cutting public
expenditure in a recession. You can add that governments have not tried to do this since the Great Depression of the 1930. If necessary you can add that the state of the art
macro used by central banks also suggests cutting government spending
in a deep recession will have harmful effects. You can explain why
this happens, and why a Eurozone type crisis can never happen in the
UK.

That does not dilute the human impact of austerity. What it does is
undercut the supposed rationale for austerity on its own terms:
mainstream economics. Having mainstream economics, and most
mainstream economists, on your side in the debate on austerity is
surely a big advantage.

Now imagine what would happen if there was no mainstream. Instead we
had different schools of thought, each with their own models and
favoured policies. There would be schools of thought that said
austerity was bad, but there would be schools that said the opposite.
I cannot see how that strengthens the argument against austerity, but
I can see how it weakens it.

This is the mistake that progressives make. They think that by
challenging mainstream economics they will somehow make the economic
arguments for regressive policies go away. They will not go away.
Instead all you have done is thrown away the chance of challenging
those arguments on their own ground, using the strength of an
objective empirical science.

Where UE is on stronger ground is where they question the
responsibility of economists. Sticking with austerity, he notes that
politicians grabbed hold of the Rogoff and Reinhart argument about a
90% threshold for government debt.

“Where was the formal, institutional denunciation of such a glaring
error from the economics profession, and of the politicians who used
it to justify their regressive policies? Why are R & R still
allowed to comment on the matter with even an ounce of credibility?
The case for austerity undoubtedly didn’t hinge on this research
alone, but imagine if a politician cited faulty medical research to
approve their policies — would institutions like the BMA not
feel a responsibility to condemn it?”

I want to avoid getting bogged down in the specifics of this example,
but instead just talk about generalities. Most economists would be
horrified if some professional body started ruling on what the
consensus among economists was. I would argue that this instinctive
distaste is odd, as UE’s medical analogy illustrates, and also
somewhat naive. I would argue that economists’ laissez faire view
about defining the consensus (or lack of it) has helped the UK choose
Brexit and the US choose Trump. I personally think economists need to
think again about this.

However to do so would go in completely the opposite direction from
what most heterodox economists wish. It would greatly increase the
authority of the mainstream, when there was a consensus within that
mainstream. It would formalise and make public the idea of a
mainstream, and inevitably weaken those outside it.

Economics, as someone once said,
is a separate and inexact science. That it is a science, with a
mainstream that has areas of agreement and areas of disagreement, is
its strength. It is what allows economists to claim that some things
are knowledge, and should be treated as such. Turn it into separate
schools of thought, and it degenerates into sets of separate
opinions. There is plenty wrong with mainstream economics, but
replacing it with schools of thought is not the progressive endeavor
that some
believe. It would just give you more idiotic policies like Brexit.

Friday, 24 March 2017

It is easy to view
the letter
from 72 MPs criticising the BBC for being biased against Brexit as
just another example of the government putting pressure on the news
organisation. But if that is all it was, it is odd to have another
conservative MP, Nicky Morgan, describe the letter as chilling.

I would argue that
this letter as another example of the fear I talked about in this
post.
Fear by Brexiteers that their little English coup may still unravel.
Their reasons for fearing this are real enough. The original Leave
vote was based on lies and on obscuring the truth. These lies are
perpetuated by those who now feel obliged to advance
the Leave cause. I talked in my last post about how Tim Harford had
recently noted that tobacco firms had managed to delay by decades the response to the
first studies in the early 1950s that smoking was harmful. What
chance, then, did economists have before the referendum? But the lies
told and truths dismissed in the referendum are going to start to
unravel as soon as negotiations begin.

One of the main
initial topics of those negotiations will be how much the UK will
have to pay the EU. Many of those who voted Leave expected it to be
the other way around. For this reason, the UK would like everything
to be discussed together, so that this bad news can be hidden. But
this is not the way the EU likes
to do things, and the negotiations are going to be done the way the
EU dictates. Remember they hold all the cards, because it is the UK
who suffers most with no deal.

This bad news could be avoided if the UK walked away, which is one reason
why the option of no deal is beginning to sound attractive
to the Brexiteers. But the British people do not want this. Here is a
recent poll
that contrasts the popularity of a EEA/Norway option with no deal.

What is described as
‘Hard Brexit’ here is really ‘No Deal Brexit’. The poll says
that as many Conservative voters will be as unhappy with no deal as
they would be with the EEA option. While the full horror
of no deal for the UK economy will take years to manifest itself in
lower GDP, the consequences in terms of firms leaving will be
immediate. David Davis has not modeled the impact of no deal because he already knows the results would be
terrible. [1]

If this is what
people feel when confronted with the truth, the only option left to
the Brexiteers is to try and hide the truth. Little things are all
they ask for from the BBC. Like not mentioning Brexit when talking about rising
inflation, because to do so would be ‘controversial’. To play
down news of firms planning to leave the UK, because that was the
news last week. To not present the view of the EU in negotiations,
because this is like a battle and the BBC must be patriotic. The
Brexiteers hope that with these ‘small modifications’ to
broadcast news, and the pure propaganda from much of the press, they can
get away with a deal that is not in the UK’s interests.

If those pursuing
this agenda do not think the war is over, it would be foolish for
those opposed to leaving the EU to believe it ended with the
triggering of Article 50. The Brexiteers fear that if there is no
deal, MPs in parliament will at last find their voice to say no.
Those opposed to leaving the EU must do all they can to encourage
that possibility.

[1] Among political
commentators, all predictions by economists are assumed to have equal weight, so
even Janan Ganesh writing in the FT can say
“politicians are allowed to question [economists] record of
clairvoyance”. That is not true, because economists’ predictions
are not all alike, as I have explained
many times. One of his favourite politicians, George Osborne, has
said
that Brexit is the “biggest
single act of protectionism in history”. History as well as
economics tells us that protectionism of this kind is invariably
harmful.

Tuesday, 21 March 2017

A long read on why it is time the rest of the media stopped treating Fox as TV news, and some UK tabloids as newspapers.

George Osborne
becomes editor of the London Evening Standard. Donald Trump blames
GCHC for bugging him because of something he saw on Fox News. The
lines between right wing media and right wing politicians seem very
blurred nowadays. This should not come as a surprise, because right wing media have been becoming much more like propaganda outlets
than normal media organisations for some time. The conventions of
journalism may have pretended otherwise, but it time we recognised
reality.

Let me define two
archetypes. The first, which could be called the truth purveyor, is
the one we are familiar with, and which much of the mainstream media
(MSM) like to imagine they correspond to. The aim is provide the best
information to readers or viewers. The second is propaganda. One way
of characterising the two archetypes is as follows. Readers have
certain interests: objectives, goals, utilities etc. The truth
purveyor will provide readers with the information they need to
pursue those interests. (As exemplified here,
for example.) Propaganda on the other hand, to borrow
from Jacob Stanley, aims to provide information that will deceive
people from seeing what is in their best interest. Propaganda
provides information that supports a particular political goal or
point of view.

Take, for example,
the issue of welfare benefits. Media as the truth-purveyor type will
try and present a rounded and accurate picture of those claiming
welfare benefits. Right wing propaganda on the other hand will focus
on examples of benefit fraud, or cases where the benefit recipient
will be perceived by the reader as taking advantage of the system,
with little or no attempt to put the example in any kind of context.
This slanted coverage is designed to give the impression that benefit
recipients are often scroungers and skivers. The political goal is to
make it easier for governments to cut welfare payments, which in turn
may allows taxes to be cut.

These are
archetypes, and any media organisation will mix the two to some
extent. Many would argue that even the most truth-purveyor type
organisation may still embody certain assumptions or points of view
that distort their readers view of what should be in their best
interest. (As argued in Manufacturing
Consent, for example.) Mediamacro is an example of
this. But that should not blind us to what is happening elsewhere.
Lines like “liberals’ nostalgia for factual politics seems
designed to mask their own fraught relationship with the truth” [1]
suggest nothing new is happening, let’s move on. That would be a
huge mistake. It is like saying all news is propaganda, who cares.
But because there are two archetypes, organisations can gradually
move from one to another, and that movement is important. It played a
crucial role in the success of Brexit and Trump.

In both in the UK
and US there is a large part of the media which is becoming more and
more like a pure propaganda outlet. We are used to thinking about
propaganda as being associated with the state, but there is no reason
why that has to be the case. In the UK and US, we now have propaganda
machines that support political ideas that are associated with the
far right, and political interests associated with the very wealthy.
Their output is governed more and more by whether it assists those
two goals.

Apologists for this
right wing propaganda say that most media organisations have their
particular political bias, and that will be reflected in the opinions
you see in that media outlet. But I’m not talking about opinion
pieces or leaders, but about the selection of stories and
increasingly about making up stories. I cannot see either the
Guardian, Mirror or MSNBC only reporting terrorist incidents by white
supremacists, and ignoring those by Muslims. Nor would these
organisations make up claims about foreign cities being ‘no go
areas’. Suggesting an equivalence between The Mail and The Mirror,
or between Fox and MSNBC, is a trap that many fall into.

Now it is natural,
in a liberal democracy, that the part of the media that conveys
propaganda should pretend it is just a purveyor of truth. When its
propaganda becomes self-evident, it is also natural for it to claim
that this is because it is others who are distorting the facts. In
this sense, the fact that Trump and his supporters talk about the
dominant liberal media producing fake news, and the right wing tabloids talk about bias at the BBC should not worry us
at all. It is merely indicative that those making the allegations are
in the business of, or supporting those, supplying propaganda. [2]
More importantly, if we allow this attempt at deflection to move us
away from examining what different parts of the media are doing, then the propagandists
have won.

………………………………………………………………………….

I think it was
Charlie Bean who first told me about the stupidity of a firm
announcing that it was going to have to make redundancies, without
specifying where those redundancies would be. It is foolish because
the atmosphere of uncertainty created means that those most able to
leave, who are almost certainly the brightest and best and therefore
those that the firm would like to keep, end up leaving the firm
because they can. Voluntary quits mean the firm no longer needs to
create redundancies, but its loses its best quality staff to other
firms.

I thought about this
when reading about yet more examples of how EU citizens are currently
being treated by this government. Colin Talbot has documented what is
going on here,
but there are literally thousands of similar
stories. People who have lived and worked in the UK for years are told by
the home office, when their application for permanent residence is
turned down, to prepare to leave the UK. Applications which ask for a
ridiculous amount of information and are turned down for often
mindless reasons. It is a system designed to increase the chances
that applicants will fail.

The effect this has,
of course, is that those most able to leave the UK, who will often be
the most able in terms of the importance of the work they do, will
go. Refusing to confirm the rights of EU residents and sending them
scary letters is how the UK government is making the same mistake as
the firm that announces future unspecified redundancies. I am
sometimes told that Brexit will allow the UK to choose the ‘best
immigrants’, the ones that will contribute most to UK output and
the public purse. Here we see Brexit achieving exactly the opposite:
a system designed to encourage the best to leave.

But this is not a
new Brexit phenomenon. As I described here,
students wanting to come and study in the UK have faced a similar
brutal regime, where a mistake by the UK bureaucracy - even when it
is acknowledged as such - can lead to additional expense for the
student and a period of uncertainty which can only set back their
learning. Students midway through their course are told they have 60
days to find an alternative institution to sponsor them or face
deportation. The UK Border Agency has no reason to believe that these
are not perfectly genuine students
who have paid good money to study in the UK, but it chooses to punish
them because of alleged failings by a university.

There is an obvious
pattern here. It is to treat those who are not UK nationals with a
complete lack of humanity. It is, quite simply, very cruel. I talked
above about how counterproductive it is, but even if it was not it
remains very wrong. It is not something that any democratic
government should do. Similar things are happening
in the US as a result of Trump’s victory. This lack of humanity
comes from a government that begins treating foreigners as a problem,
as something to be discouraged, rather than as the people that they
are. And it persists because a large part of the press deliberately
ignores what is going on. That in turn reduces coverage in the
broadcast media.

Contrast this with
Germany, which has admitted around 1 million refugees over the last
two years. Whatever the motives
of the German government, German society adopted a ‘welcome
culture’ to these refugees. There have been problems of course, but
it is significant that the most serious you may have read about have
been made up by certain
US media organisations. Contrast this with the UK government shutting
down
the ‘Dubs amendment’ programme after only a few hundred refugee
children had been admitted to the UK. For Germans it seems that
refugees are people who have suffered and need help, but for the
British they are something to fear and should be kept away at all
costs.

Why is Germany
welcoming a million refugees and the UK appears to do what they
can to keep them out? Is the difference between the two countries
something to do with an innate difference in national character? Do
we in the UK allow our government to continue their inhuman treatment
of foreign nationals because there is

“a special kind of
British suggestibility – willingness to obey orders, thinking in
generalisations, the search for panaceas, faith in power, which made
many British capable of falling to deeper depths than many people of
other nations”

Of course not. The
above is a quote
from Stephen Spender, visiting Germany in 1945, where I have changed
German to British. After WWII it was common to believe that what
happened in Germany under Hitler could only have happened if there
had been some common abnormality in the German character. It was as
mistaken then just as it is mistaken now to believe the British are particularly hostile to foreigners. But we should not be surprised when
those outside the UK begin to think that way.

There is a much
simpler explanation in both cases. The state propaganda machine of
Nazi Germany was a critical ingredient in their rise to power and
maintaining power. Hitler devoted
chapters of Mein
Kampf to the study and practice of propaganda. It is perhaps the
best real world example of the propaganda archetype I described
before. In the UK and US it is very different. Critically propaganda
outlets do not have a monopoly of information, and they need to
appear much like the rest of the media to retain their readers and
their influence on the national stage. But a large part of the UK and
US media is nevertheless increasingly acting as a propaganda vehicle,
particularly in the area of immigration.

This change is
measurable, as this report
of a study shows. To quote “over the last 10 years [the UK press]
appears to have been complicit in the narrowing of a discussion that
is now characterised by an increasingly negative tone.” The
anti-immigration propaganda in the Mail and Express reached a peak
just before the referendum. As Liz Gerard describes here,
these two papers printed on average two or three hostile immigration
stories in each issue in 2016. The day before polling, the Mail
printed six whole pages devoted to immigration. You would have to be
a fool to believe these were ‘reflecting the interest of readers’:
it was designed to push the referendum vote the way these papers
wanted. It was pure propaganda.

…………………………………………………………………………..

The are lots of
stories around about a post-truth world created by social media. It
is usually written up as if it is a new phenomenon created by new
technology, but as Timothy Garton Ash notes
‘post-truth’ is nothing new. Equally the hype over Cambridge
Analytica (here
or
here), whether it is accurate or not,
is just the technological extension of something that is already
happening, and has happened in the past. Most people still rely on the
MSM for their news. Post-truth mainly comes from the part of the MSM
whose business is propaganda, and the inability
of others to treat it as such. Fake news stories on social media did
not
win the election for Trump. Fox News almost certainly
did.

As Tim Harford
notes,
successful attempts to divert those in a democracy from the truth
have a long history. Scientists published evidence that smoking
caused lung cancer in the early 1950s. It took decades for that
information to lead to campaigns to discourage smoking and for
smokers to acknowledge there was a problem, and the reason it took
decades was that the tobacco companies conducted a PR plan with that
aim in mind. Exactly the same happened with climate change, with
considerable success in the US as we are now witnessing with Trump’s
election. As a tobacco firm wrote “doubt is our product”.

As Tim and
George Lakoff explain,
simply rebutting lies with facts can often be counterproductive. The
Leave campaign's £350 million a week was a classic example. The more
it was talked about, the more it became fixed in the mind of voters.
The regrettable truth is that most people do not read the detail, but
instead just absorb the headline. In many ways the EU referendum is a
classic example of how facts can lose out to propaganda.

All this can just
seem depressing, but it is not if we learn some obvious lessons. The
first, which Ben Chu explains,
is for policy makers not to fall into the trap of appeasement.

“Christina Boswell and James Hampshire have highlightedhow the public discourse on immigration in Germany was
transformed between 2000 and 2008. Social Democratic politicians used
familiar arguments about the economic benefits of immigration. But
they did this alongside a campaign to promote positive narratives
about immigration and its place in the country’s history to counter
entrenched perceptions of Germany being kein Einwanderunglsand (“not
a country of immigration”). This twin approach largely succeeded in
changing attitudes, flowering in the generous position taken by
Angela Merkel’s Christian Democrat government towards Syrian
refugees in the summer of 2015.

By contrast in the UK, at the same time, Labour began to talk up
“British jobs for British workers” and never seriously rebutted
the dominant and dismal narrative of the tabloid press about
immigration being an economic burden and culturally corrosive,
arguably helping to set the scene for the current bout of
self-harming Brexit-related xenophobia.”

Now politicians here may respond that the German example is
impossible given the strength of the propaganda coming from UK tabloids (compared to its relative absence in Germany), but that just
strengthens my point that we should start recognising that propaganda
for what it is. That recognition needs to start in the rest of the
mainstream media. According to a study outlined here,
“a right-wing media network anchored around Breitbart developed as
a distinct and insulated media system ... This pro-Trump media sphere
appears to have not only successfully set the agenda for the
conservative media sphere, but also strongly influenced the broader
media agenda, in particular coverage of Hillary Clinton.”

But the authors also note that “Our data strongly suggest that most
Americans, including those who access news through social networks,
continue to pay attention to traditional media, following
professional journalistic practices, and cross-reference what they
read on partisan sites with what they read on mass media sites.”
What this traditional media needs to do, in both the UK and US, is to
recognise propaganda for what it is, and treat it with the disdain
that it deserves.

In the US that is quite a challenge because a lot of that propaganda
is now created or recycled by the President himself. In the UK it is
a challenge because the right wing tabloids have the government’s
support, and the government holds the purse strings of the BBC. [4]
It is very easy just to ignore what is happening, and carry on as
usual. But this inability or unwillingness to recognise the danger
posed by propaganda is part of the reason 2016 happened. Liberal
democracy’s survival in the UK and US may depend on recognising and
resisting what is in the process of destroying it.

[1] Taken from Stahl
and Hansen. The implication that they draw, that
propaganda as news or post-truth or whatever you want to call it can
be combatted by a “democratic revival” seems simply naive. To see
the profound difference between, say, the Blair government compared
to what came before and after them, you only have to look
at how they regarded academics.

[2] For those who
say how do we know who is telling the truth, then you are part of the
problem.

Sunday, 19 March 2017

The authors have a
post
on the Prime website in which they, among other things, respond to
two blog posts of mine where I mention their work on Brexit. In the
first post
they mention [1], I use a graph from their paper to illustrate how
important the Single Market was for UK exports. Here is the graph.

I then wrote

“But didn’t the CBR report say that the benefits of the Single
Market had been exaggerated by the Treasury? Yes it did. Here is some
of its reasoning. That growth in UK export share after the Single
Market is not as impressive as it looks, because there is an
underlying 6% positive trend in the share, which you can detect
before we joined the EU. That looks pretty on a picture, until you
realise it is nonsense. A 6% trend rise in an export share will imply
that at some point not too far away UK exports to the EU will be as
high as total EU GDP. UK exporters are just not that much better than
exporters in other countries. There is no underlying trend rise in
the UK’s export share.”

By export share, it
is obvious that I’m talking about share in destination GDP, as in
the chart. In my paragraph there is an error. I used a 6% figure
rather than the correct 3.5% figure for their trend in export
penetration relative to the non-EU penetration. It was a particularly
stupid error, because just below Chart 7 is Chart 8, which contains
the correct figure.

But, as the authors
must know, this error is not important to my argument. Replace 6 by
3.5 in the relevant paragraph and it still makes perfect sense. What
I was criticising was the notion that there was any substantial
underlying trend in export penetration, and that the impact of EU
membership should be judged relative to that trend. You can see
from this chart how ludicrous a 3.5% trend is: it implies that
without EU membership the UK exports share would be now above 10% and rising
fast. This trend seems to be an important part of their judgement
that UK export penetration relative to the EU would fall by
substantially less than the Treasury assume in their analysis. The
trend makes no sense, unless the aim is to make the impact of EU
membership look small.

So what is the
authors’ response to my basic criticism in their Prime piece? There is none.

As far a the 6
rather than 3.5 is concerned, it is also odd is that this is the
first time they have mentioned the error to me. The post was from
mid-January, and I would have happily changed 6 to 3.5 if they had
pointed it out to me earlier.

The second post
was a discussion of the notion of ‘fake economics’. I said fake
economics could be described as “economic analysis or research that
is obviously flawed but whose purpose is to support a particular
policy.” or “We can equally talk about evidence based policy and
its fake version, policy based evidence.” Here is what I wrote in
full about their study in that post.

“The CBR analysis is less obviously fake. However Ben Chu has
gathered
the views of some academics who are experts in trade theory,
including Richard Baldwin (who has just written a definitive and
widely praised book
on the ‘new globalisation’) and Alan
Winters, both hugely respected with immense experience, who pour
some very cold water over the study.”

How do the authors
respond to this second post in the Prime piece. They write

“It is unusual for
Wren-Lewis to rely uncritically on mainstream economists, but he was
willing to do so in this case. With many of Wren-Lewis’ articles
being used by one of us in economics teaching to encourage students
to query and to test what is considered ‘mainstream’ it seems
more than a little surprising to be discredited for daring to do so.”

This is wrong in many ways. First, I was not relying on others, as I
had serious misgivings about their use of trends that I outline above.
Second, I made no mention of ‘mainstream’ and heterodox anywhere,
so any suggestion that this was behind what I wrote is their
invention. Finally, there is no problem with anyone challenging
anyone else.

Let me reproduce one of the quotes from Ben’s piece

“The HMT [Treasury] use of gravity model was perfectly in line with
best practice. It was classic evidence-based policy analysis”, said
Richard Baldwin, Professor of International Economics at The Graduate
Institute of Geneva. Professor Baldwin went on to accuse Mr Gudgin
himself of engaging in “policy-based evidence making” and “using
evidence the way a drunk uses a lamp post – for support, not
illumination”.

So Richard Baldwin was accusing the authors of exactly the fake
economics that I talked about. Given my suspicions about their
treatment of trends discussed above, I felt justified in writing
about their piece in this context.

I could have ignored Richard Baldwin’s criticism and my own
suspicions, and not included them in this post. But here is another
quote from Ben’s piece:

“Dr Graham Gudgin of the CBR criticised the Treasury’s
analysis, which predicted a major hit to the UK economy by 2030
if the UK experienced a “hard Brexit”, in unusually strident
terms describing it as “very flawed and very partisan”. Dr Gudgin
said he “suspected” Treasury civil servants had been leaned on by
ministers to produce the results David Cameron and George Osborne
wanted.”

Recall that the Centre of Economic Performance argued,based on their own extensive analysis, that the Treasury had underestimated the costs of Brexit, so
presumably the accusation of ‘very flawed and very partisan’
applies to their analysis too. If one of the authors was happy to
argue that the analysis of others had been designed to produce
certain results, I felt it only fair to ask the same question of the
authors.

Saturday, 18 March 2017

If the title seems
weird, remember that Corbyn only got onto the ballot in 2015 because
some MPs felt it would be good for Labour party democracy if the left
was represented. The current rule is that 15% of MPs and MEPs have
to nominate you if you want to stand as Labour leader. That rule can
preclude anyone from the left getting onto the ballot given the
current composition of MPs and MEPs. Corbyn’s team want to turn 15%
into 5%, but the great majority of MPs will do what they can to stop
that happening.

It is this that is
keeping Corbyn in power. A majority of Labour party members want to
be able to vote for someone from the left in any future leadership
election. If the 15% stands, that seems almost impossible. These
members therefore want him to stay in power for as long as it takes
to change the 15% rule. But Labour MPs have no intention of giving
way on this, because they believe that if the rule is changed the
left will have a stranglehold on the leadership, given the current
composition and views of members. That is how Labour MPs are keeping
Corbyn in power.

Corbyn’s
popularity among the membership has changed significantly since the
2016 election. Then he won easily.
Since then his popularity has decreased substantially,
in part because of his poor handling of Brexit and also because it
has become more difficult to claim that his unpopularity in the polls
is due to Labour disunity. But MPs will not put up a challenger,
because they suspect the challenger will fail. It will fail because by voting for someone who supports the 15% rule members believe they will be voting for their own
disenfranchisement. This has become a power struggle between MPs and
members, and Corbyn is becoming just a pawn in this game.

If that seems
fanciful to you, just consider what happened last time round. In an
emotional response to the referendum defeat, MPs passed a vote of no
confidence in Corbyn. It was a challenge that was far too soon,
giving the impression among members that Corbyn was only doing badly
because Labour MPs were out to get him. The challenger that MPs chose
for the subsequent election contest, Owen Smith, adopted virtually
the same policy proposals as Corbyn/McDonnell, but crucially did not back changing the 15% rule. As a result, the members
understandably responded by saying if you do not trust us, we do not
trust you.

Owen Jones has
called
for a deal whereby Corbyn would step aside in return for someone from
the left being on the ballot to replace him, but I cannot see MPs
agreeing to that. Their strategy is to exhaust Corbyn and the
membership, and preserve the 15% rule at all cost.

This is not so much
a battle about policies as a battle about power. MPs intend to win it
by keeping the 15% rule, and waiting for Corbyn to go through sheer
exhaustion, or waiting for members to give up and hand power back to MPs.
Labour members hope Corbyn can hang on long enough to change the 15%
rule. Events like Brexit, Scottish independence and a general
election just pass by, only mattering if they have implications for
who achieves final victory in this war.

Now many in the
political commentariat will assume that of course Labour members
cannot be trusted, and so the strategy of Labour MPs is correct.
Their pleas for Corbyn to ‘for pity’s sake go’ are just for
show. But if that is also your view, consider two points.

The first point
concerns MPs. The current decline of the Labour party as an effective
opposition did not begin with Jeremy Corbyn. It began, as Larry
Elliott clearly delineates,
with the global financial crisis that happened on Labour’s watch.
The unforced errors began when Ed Miliband, and the team around him,
made the fatal mistake of not challenging the Tory narrative about
the previous Labour government. That mistake meant that Labour was
blamed for austerity, Labour were not trusted with the economy, and
Miliband’s poll ratings just got steadily worse, even though many
voters were experiencing an unprecedented decline in real earnings.

It was MPs reaction
to the 2015 defeat, and a general belief among many of them that
Labour had to move further to the right, which ensured a victory for
the left in the subsequent leadership elections. Corbyn and McDonnell
tried to create an opposition of all the talents (or at least those
that were willing) and reach a consensus on policy. But at each turn
they were met by a small group of MPs that constantly briefed against
them, and other MPs that did nothing to stop this. Anyone
with a clear head could see this strategy by rebel MPs was totally unproductive:
Corbyn had to be seen to fail on his own account.

The most recent
misjudgement by MPs was over Brexit. Again Corbyn gets all the
attention, but it was the majority of MPs that decided they should
focus on the challenge from UKIP and vote to give May total authority
over the negotiations. I think this misjudgement epitomised almost a
decade of bad decisions all of which involved an element of
appeasement. John Curtice has explained why, with most Labour voters
choosing Remain, voting through Article 50 was a very odd decision.
As I’ve argued here,
the referendum placed no obligation on MPs to vote to allow May to
choose a Hard Brexit. If you are unconvinced about this, imagine the
referendum had been to do nothing about climate change. Would MPs
have been obliged in that case to follow the ‘will of the people’?
Would it have been right to ignore a clear consensus among experts
that their implementation of the vote would be disastrous? The actual EU referendum has
the same ingredients as this imaginary case.

The second point is
about membership. There is one clear Labour achievement since 2015, a
huge increase in membership which numbers more than all the other
parties combined. Is it really healthy that this should be regarded
by most MPs as a problem? Arguments that half a million people are
either Trots or under the influence of Trots are nonsense.
Although it was Corbyn who inspired the increase in membership, it
was not the left that wrote the rules that allowed the leader to be
chosen by the membership alone. Having tried to make the leadership
election more democratic, it is not plausible to then turn round and
say you got the wrong half million.

There is a
legitimate concern in allowing members to have almost complete
control over which MP they choose as leader. It is not that they will
choose a leader who is too left wing, but instead that they will
underrate the importance of being able to win general elections, or
at least not fully appreciate what it takes to win these elections.
To this I would add that the membership may be insufficiently
ruthless in getting rid of a leader who is failing to win,
particularly when this failure is often very unfair (given our media,
for example). But with questions like this we have also to ask
whether MPs would be much better at judging success and punishing
failure, and the experience with Miliband plus the constant attempts
to appease the right suggest not. [1]

Elliott describes
how many of the policies that Labour currently put forward - Brexit
aside - are broadly popular when tested with the public. However if
you attach the name Labour to these proposals, their popularity
decreases sharply. Those who say Labour have become unpopular because
they have ‘moved too far to the left’ misunderstand what is going
on, or have more questionable motives. Elliot describes it as Labour
becoming a toxic brand. Corbyn is part of that, but only part. The
record indicates MPs are also responsible for the current mess.

As John Curtice
explains,
the question is not will the brand survive, but how and when it will
recover. I can see two ways forward. The first way is for MPs to
trust their membership, change the voting rules, and allow Corbyn to
resign sooner rather than later. If he does not resign, the left has
to bring forward a challenger. With good judgement, the new leader
can lead from the left but with policies that the broad church that is Labour can live with, combined with a strategy
for convincing the electorate that would make Owen Jones happy. The
second way is that MPs keep the 15% rule, wait for Corbyn and the
membership to give up exhausted, and then hope for a Macron type
figure to emerge from among their number. The key question is which of
those two do you think is more likely to give us a plausible
candidate for Prime Minister?

[1] The Conservative
Party shows that members can learn. They chose
Cameron not because they wanted to modernise, or be green, or hug
hoodies, but because (after 2 defeats) they realised the party needed
to bury the image of the nasty party and they saw in Cameron a person who could
achieve that.